LETTER OF OFFER ( LOF )

Transcription

1 LETTER OF OFFER ( LOF ) THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION This Letter of Offer is sent to you as a shareholder of R Systems International Limited (hereinafter referred to as RSIL or the Company or the Target Company ). If you require any clarifications about the action to be taken, you may consult your stockbroker or investment consultant or the Manager / Registrar to the Open Offer. In case you have sold your equity shares in the Target Company, please hand over this LOF and the accompanying Form of Acceptance-cum-Acknowledgement and Transfer Deed to the member of the stock exchange through whom the said sale was effected. Mr. Bhavook Tripathi ( Acquirer ), having residential address at Shree Goverdhan Nath Housing Society, North Main Road, Lane B, Koregaon Park, Pune Tel No MAKES AN OFFER TO THE EXISTING SHAREHOLDER(S) OF R SYSTEMS INTERNATIONAL LIMITED Registered Office: B-104A, Greater Kailash I, New Delhi (Tel: , Fax: , rsil@india.rsystems.com) TO ACQUIRE 33,38,042 Equity Shares of `10/- each representing 26% of the issued, subscribed, paid up equity share and voting capital of the Company comprising of 1,28,38,621 fully paid up equity shares (on fully diluted basis) ( Equity Shares ) at a price of ` (Rupees One Hundred Fifty and Paisa Seventy Five Only) per fully paid-up Equity Share ( Offer Price ), in cash ( Open Offer ). 1. This Open Offer is being made by the Acquirer pursuant to regulation 3(1) and 4 of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and subsequent amendments thereto ( SEBI (SAST) Regulations ) for substantial acquisition of share and voting rights. 2. The Open Offer is not subject to any minimum level of acceptance. 3. If there is any upward revision in the Offer Price by the Acquirer upto 3 working days prior to the commencement of the tendering period i.e. up to 1 st January, 2013 or withdrawal of the Open Offer in terms of the SEBI (SAST) Regulations, the same would be informed by way of the Offer Opening Public Announcement in the same newspapers where the original Detailed Public Statement has appeared. Such revised offer price would be payable for all the Equity Shares, tendered anytime during the Tendering Period. 4. Since certain Equity Shares being acquired under the Open Offer may have to be acquired from persons resident outside India who have acquired their shares other than as foreign direct investment, under the extant foreign policy of the RBI, the Acquirer has made an application to RBI dated 15 th December 2011 seeking approval for the acquisition of shares pursuant to the Open Offer from non-resident Shareholders. RBI, vide its reply dated 19 th December 2011 granted approval to acquire Equity Shares through the Open Offer from the eligible shareholders subject to certain conditions. For a detailed status of the statutory approvals please refer to paragraph 7.13 of this Letter of Offer. 5. This is not a competing offer under regulation 20 of SEBI (SAST) Regulations. There has been no competing offer made as on the date of this LOF. 6. Form of Acceptance cum Acknowledgement is enclosed with this Letter of Offer. 7. A copy of PA, DPS, 1 st Supplemental PA, 2 nd Supplemental PA and Letter of Offer (including Form of Acceptance cum Acknowledgement) is also available on website of SEBI ( and Manager to the Offer ( 8. All correspondence relating to this Open Offer, if any, should be addressed to the Registrar to the Open Offer viz. Link Intime India Private Limited. MANAGER TO THE OFFER REGISTRAR TO THE OFFER KJMC Corporate Advisors (India) Ltd (formerly KJMC Global Market (India) Ltd) 168, 16th Floor, Atlanta, Nariman Point, Mumbai Telephone: Fax: rsil.offer@kjmc.com Contact Person: Ms. Sangeeta Sanghvi / Mr. Swapnilsagar Vithalani SEBI Regn. No.: INM Link Intime India Private Limited C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (W), Mumbai Telephone: , Fax: rsil.offer@linkintime.co.in Contact Person: Mr. Pravin Kasare SEBI Regn. No.: INR OFFER OPENS ON: 4 th January, 2013 OFFER CLOSES ON: 17 th January, 2013

2 The schedule of major activities relating to the Open Offer is as follows: Activity Public Announcement sent to stock exchanges. Detailed Public Statement (DPS) published in the newspapers Last date for announcement of competing offers ORIGINAL REVISED Date Day Date Day 15 th December, 2011 Thursday 15 th December, 2011 Thursday 22 nd December, 2011 Thursday 22 nd December, 2011 Thursday 12 th January, 2012 Thursday 12 th January, 2012 Thursday Identified Date* 31 st January, 2012 Tuesday 20 th December, 2012 Thursday Dispatch Letter of Offer to shareholders 7 th February, 2012 Tuesday 28 th December, 2012 Friday Last Date for upward revision of Offer Price and / or Offer Size Last date by which Board of Target Company shall give its recommendation in the same newspapers as of DPS 8 th February, 2012 Wednesday 1 st January, 2013 Tuesday 10 th February, 2012 Friday 2 nd January, 2013 Wednesday Offer Opening PA Date 10 th February, 2012 Friday 3 rd January, 2013 Thursday Date of commencement of Tendering Period (Offer opening Date) Date of Closure of Tendering Period (Offer closing Date) Last date of communicating of rejection / acceptance and payment of consideration for accepted tenders / return of unaccepted shares 14 th February, 2012 Tuesday 4 th January, 2013 Friday 29 th February, 2012 Wednesday 17 th January, 2013 Thursday 15 th March, 2012 Thursday 31 st January, 2013 Thursday * Identified Date is only for the purpose of determining the names of the shareholders of the Target Company to whom the Letter of Offer would be sent. All owners (registered or unregistered) of Equity Shares of the Target Company (except the Acquirer) are eligible to participate in the Open Offer at any time before the closure of the Open Offer. Note: Duly Signed Application cum Acknowledgment and Transfer Deed(s) together with share certificate(s) should be dispatched by Registered Post/Courier or hand delivered to the Registrar to the Open Offer at above address to arrive not later than 4:00 PM on Thursday, 17 th January,

3 RISK FACTORS A. RELATING TO THE OPEN OFFER The risk factors set forth below pertain to the Open Offer and are not in relation to the present or future business operations of the Target Company or other related matters, and are neither exhaustive nor intended to constitute a complete analysis of the risks involved in participation or otherwise by a shareholder in the Open Offer. The shareholder(s) of the Target Company are advised to consult with legal, financial, tax, investment or other advisors and consultants of their choice, if any, for analysing further risks with respect to their participation in the Open Offer. 1. The Open Offer involves an offer to acquire up to 26% of the paid up equity share & voting capital (on fully diluted basis) of the Target Company from the eligible persons for the Open Offer. In the case of over subscription in the Open Offer, acceptance would be determined on a proportionate basis and hence there is no certainty that all the shares tendered by the shareholder(s) in the Open Offer will be accepted. Therefore, there is no certainty that all the Equity Shares tendered by the shareholder(s) in the Open Offer will be accepted, in the event there is oversubscription of the Open Offer. 2. In the event that (a) a statutory and regulatory approval is not received in a timely manner, (b) there is any litigation leading to a stay on the Open Offer, or (c) SEBI instructing the Acquirer not to proceed with the Open Offer, the Open Offer process may be delayed beyond the schedule of activities indicated in this LOF. Consequently, the payment of consideration to the shareholder(s) of Target Company whose Equity Shares would have been accepted in the Open Offer as well as the return of Equity Shares not accepted by the Acquirer may be delayed. In case of the delay, due to non-receipt of statutory approvals, as per Regulation 18(11) of the SEBI (SAST) Regulations, 2011, SEBI may, if satisfied that the non-receipt of approvals was not due to wilful default or negligence or failure to diligently pursue such approvals on the part of the Acquirer, grant an extension for the purpose of completion of the Open Offer subject to the Acquirer paying interest to the shareholder(s) for the delay, as may be specified by SEBI. 3. The shareholder(s) should note that the shareholder(s) who have tendered Equity Shares in acceptance of the Open Offer shall not be entitled to withdraw such acceptance during the Tendering Period even if the acceptance of Equity Shares under the Open Offer and dispatch of consideration gets delayed. 4. The tendered shares and documents would be held in trust by the Registrar to the Open Offer, till such time as the process of acceptance of tenders and the payment of consideration is completed (as per the SEBI (SAST) Regulations and other applicable laws, rules and regulations). Further, the shareholders will not be able to trade, sell, transfer, exchange or otherwise dispose of such Equity Shares until the completion of the Open Offer or withdrawal of the Open Offer in accordance with Regulation 23(1) of the SEBI (SAST) Regulations. 5. The Open Offer is subject to the receipt of statutory and regulatory approvals by the Acquirer, and wherever applicable, by the Target Company, in connection with the Open Offer. The Acquirer may not to be able to proceed with the Open Offer in the event the approvals are not received in terms of Regulation 23 of the SEBI (SAST) Regulations. Delay, if any, in the receipt of these approvals may delay completion of the Open Offer. 6. The Acquirer and Manager to the Offer accept no responsibility for statements made otherwise than in the LOF / PA / DPS / 1 st Supplemental PA / 2 nd Supplemental PA and any other advertisements & materials issued by or at the instance of the Acquirer or the Manager and anyone placing reliance on any other sources of information (not released by the Acquirer) would be doing so at his / her / its own risk. B. RELATING TO THE ACQUIRER 1. The Acquirer makes no assurance with respect to the market price of the Equity Shares of the Target Company upon the completion of the Open Offer, and disclaims any responsibility or obligation of any kind (except as required by applicable law) with respect to any decision by the shareholder(s) on whether or not to participate in the Open Offer. 2. The Acquirer cannot provide any assurance with respect to the financial performance and the market price of the Equity Shares of the Target Company before, during or after the Open Offer and expressly disclaims any responsibility or obligation of any kind (except as required by applicable law) with respect to any decision by any 3

4 shareholder on whether to participate or not to participate in the Open Offer. 3. The Acquirer makes no assurance with respect to his investment / disinvestment decisions relating to his proposed shareholding of the Target Company. 4. The Acquirer does not accept the responsibility with respect to the information contained in PA or DPS or 1 st Supplemental PA or 2 nd Supplemental PA or this Letter of Offer that pertains to the Target Company and has been compiled from publicly available resources. 5. Various shareholders and other complainants of the Target Company have filed complaints against the Acquirer to SEBI. The Acquirer has replied to the same adequately under advise to SEBI. However, notwithstanding such response, SEBI may initiate penal action against the Acquirer under the SEBI Act, 1992 and various regulations formed thereunder. Such complaints, responses thereto and other correspondence have been made available for inspection under this Letter of Offer. The brief details of such complaints are: - Sr. No. Date of the complaint 1. 7 th January, th January, th February, th March, 2012 Complainant Applicable regulation Date of the response sent by the Acquirer Target Company Regulations 22 of the SEBI (SAST) Regulations 23 rd January, 2012 Mr. Satinder Singh Rekhi Mr. Akthar Razvi Mr. Uday Sharma Regulation 22 of the SEBI (SAST) Regulations Regulation 10 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and Regulation 3(1) of SEBI (SAST) Regulations 14 th February, th February, 2012 N.A. 30 th March, As a consequence to the aforesaid complaints and also as per SEBI directions, the Acquirer has given certain undertakings and have furnished certain details to SEBI regarding disclosures in the Offer Document, which are made available for inspection under this Letter of Offer. 7. In addition to the above, the said Mr. Satinder Singh Rekhi issued a letter dated 13th September, 2012 to SEBI alleging violations of Regulation 22 and the provisions with respect to Persons Acting in Concert of the SEBI (SAST) Regulations. Since, the aforesaid matters were pending before the SAT and subsequently being dealt with by SEBI and the final outcome/decision was yet to come, the Acquirer abstained from replying to the aforesaid letter. Further, a similar letter dated 4th September, 2012 alleging the aforesaid violations was also issued by Mr. Satinder Singh Rekhi to the Acquirer and again the same was not replied since the allegations were sub-judice before SAT. 8. By its letter dated 2 nd May 2012, SEBI has sought certain information as follows: - (a) Whether Mr. Tripathi first purchased the shares and then sold the same on 29 th July, If yes, SEBI asked for documentary evidence for the same. The Acquirer has confirmed that he had first purchased and then sold shares on 29 th July, The documentary evidence submitted to SEBI is available for inspection at the address of Manager to Open Offer. (b) Whether payment was made by Mr. Bantwal for the shares purchased by him on 29 th July, 2011 and the source of funds accompanied by the necessary documents viz., bank statements as a proof for the same; and (c) Whether at the time of sale of shares by Mr. Bantwal on 29 th July, 2011, he received funds and documentary evidence for the same. 4

5 The Acquirer had submitted that he does not have access to Mr. Bantwal s transaction details and his books of accounts. Hence he was unable to comment on the same or provide details regarding Mr. Bantwal s transactions. 9. By its letter dated 13 th February, 2012, SEBI has sought certain information as follows: (a) Investment details of the Acquirer in other companies; (b) Justification as to why the Offer should not be made on Regulation 4; (c) Justification of non-applicability of Regulation 22(1); (d) SEBI observed that the Acquirer had acquired 7.18% Equity Shares on the date of public announcement and requested confirmation as to whether the said Equity Shares have been transferred to the Acquirer s account; (e) Whether the aforementioned Equity Shares were received in physical or demat form and if the Equity Shares were received in demat form, SEBI requested for a copy of the demat statement of the Acquirer during the month of December 2011; and (f) SEBI requested the Acquirer to respond to the complaints received from one of the shareholders where, it has been alleged, inter-alia that the Acquirer and Mr. Bantwal have been PAC since July The Acquirer has confirmed and submitted the response along with requisite documentary evidence to SEBI. The letter of SEBI and its reply along with documentary evidence are available for inspection at the address of Manager to Offer. 10. By its letter dated 25 th July, 2012, SEBI has made certain allegations against the Acquirer for violations of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ( Takeover Regulations, 1997 ) and the SEBI (SAST) Regulations, 2011, based on various complaints made by the shareholders and promoters of the Target Company and Target Company. SEBI may initiate suitable legal action against the Acquirer for the same under the aforesaid regulations and the SEBI Act, The allegations are as below: - A. Alleged violations in SEBI Observation Letter dated July 25, Alleged violation of Regulation 10 read with 14(1) of Takeover Regulations,1997 a. It has been observed from the shareholding built-up of the acquirer that he was holding 18,42,635 shares representing 14.96% of the paid up capital of the target company as on 28 th July, b. The acquirer purchased 2,71,004 shares representing 2.1% of the paid up capital of the target company on 29 th July, 2011 and then sold the shares on the same day. c. Since the acquirer crossed 15% on 29 th July, 2011 itself with the aforesaid acquisition, the offer obligations were triggered on that date but the acquirer failed to make an open offer/pa. d. Prima facie, the acquirer has, thus, violated regulation 10 read with regulation 14(1) of Takeover Regulations, Alleged violation of regulation 15(1) (c) of Takeover Regulations, a. It has been observed from the DPS dated December 22, 2011 that the acquirer acquired 9,19,640 shares representing 7.18% of the paid up share capital of the target company on 15 th December, 2011 through market purchase. 5

6 b. In terms of regulation 15(1) (c) of Takeover Regulations, 2011, the PA shall contain information pertaining to nature of the proposed acquisition. As the same was not specified, the Acquirer violated provisions of regulation 15(1) (c) of Takeover Regulations, Alleged violation of regulation 22(1) and 22(2) of Takeover Regulations, On examination of trades of the acquirer, it was observed that the shares were purchased by the acquirer between 9:15 AM and 11:30 AM on 15 th December, It has also been observed that, prima facie, there existed a pre-understanding/agreement between sellers and the acquirer to sell the shares to the acquirer on the date of PA. One of the investors, Mr. Manmohan Passi has given a declaration that he had a preunderstanding with the acquirer for selling the share to him and the undertaking given by Mr. Passi in this regard, has been notarized in USA. As per regulation 22(2), the acquirer shall complete the acquisition of shares or voting rights subject to the acquirer depositing in the escrow account, cash of amount equal to 100% of the consideration payable under the Open Offer assuming full acceptance of the open offer. However, the acquirer failed to put 100% cash in escrow account although acquisition of shares was completed on the date of PA itself. Therefore, prima facie, the Acquirer has violated regulations 22(1) and 22(2) of Takeover Regulations, B. Securities Appellate Tribunal ( SAT ) proceedings With respect to the aforesaid allegation no. 3, the Acquirer filed an appeal before SAT bearing No. 172 of 2012 ( SAT Appeal ) against the aforesaid letter dated 25 th July, 2012 issued by SEBI, inter-alia, contending that the Acquirer had made only market purchases pursuant to the Public Announcement and that there was no pre-understanding with Mr. Manmohan Passi. Therefore, there was no violation of Regulation 22(1) of the SEBI (SAST) Regulations. Further, the Acquirer also, inter-alia, prayed that the allegation made by SEBI with respect to violation of Regulation 22(1) of the SEBI (SAST) Regulations be set aside. In the aforesaid SAT Appeal, SAT passed an order dated 7 th September, 2012, inter-alia, directing SEBI to provide the Acquirer with the aforesaid declaration filed by Mr. Manmohan Passi with SEBI regarding the pre-understanding with the Acquirer and directed the Acquirer to respond thereto within three weeks thereafter ( SAT Order ). Further, SAT also directed that SEBI may issue its comments/observations after considering the reply received from the Acquirer. SEBI s letter dated 20 th September, 2012 Pursuant to the SAT Order, SEBI addressed a letter to the Manager, inter-alia, providing a copy of the requisite declaration filed by Mr. Manmohan Passi alongwith other documents / information. Manager s reply dated 27 th September, 2012 In reply to the aforesaid, the Manager in its letter dated 27 th September, 2012, requested SEBI to provide certain other documents/information. SEBI s reply dated 10 th October, 2012 In reply to the aforesaid, SEBI, in its letter dated 10 th October, 2012, stated that SEBI had complied with the SAT Order and the Acquirer was required to reply within three weeks. Acquirer s submissions dated 11 th October, 2012 through Manager s letter dated 11 th October, 2012 The Acquirer, in his letter dated 11 th October, 2012, inter-alia, stated that the declaration filed by Mr. Manmohan Passi was false and that the allegations against the Acquirer in this regard are false and baseless. Acquirer s submissions dated 30 th October, 2012 through Manager s letter dated 31 st October 2012 The Acquirer, in his letter dated 30 th October, 2012, inter-alia, stated that he did not have any understanding or agreement with Mr. Manmohan Passi and without prejudice to the above he shall deposit 100% of the Offer Size in the Escrow Account prior to beginning of the tendering period as directed by SEBI. 6

7 SEBI s letter dated 3 rd December, 2012 SEBI, in its letter dated 3 rd December, 2012 to the Manager, inter-alia, stated that the submissions made by the Manager have been taken on record and that since the Acquirer has agreed to put 100% cash in escrow account, SEBI may not initiate any proceedings against the Acquirer for the alleged violation of Regulation 22(1) and 22(2) of the SEBI (SAST) Regulations. 7

8 INDEX Sr. No. Subject Page No. 1. Definitions/Abbreviations 9 2. Disclaimer Clause Details of the Offer Background of the Acquirer Background of the Target Company Offer Price and Financial Arrangements Terms and Conditions of the Offer Procedure for Acceptance and Settlement Documents for Inspection Declaration by the Acquirer 45 8

9 1. DEFINITIONS/ABBREVIATIONS Sr. #. Abbreviations Definitions 1. Acquirer Mr. Bhavook Tripathi 2. Target Company R Systems International Limited 3. BSE BSE Limited 4. Board/Board of Directors/ Directors Board of Directors of R Systems International Limited 5. CDSL Central Depository Services (India) Limited 6. Depositories NSDL and CDSL 7. DP Depository Participant 8. ECS Electronic Clearing System 9. Eligible Persons for the Offer All owners of Equity Shares registered or unregistered of R Systems International Limited. (who own Equity Shares at any time prior to the Offer Closing Date) except the Acquirer 10. EPS Earnings Per Share 11. Equity Share(s) or Shares Fully paid up equity share(s) of `10/- each of R Systems International Limited 12. shareholder(s) / equity shareholder(s) All owners (registered or unregistered) of Equity Shares of the Target Company 13. FEMA Foreign Exchange Management Act, 2000 and subsequent amendments thereto 14. Form of Acceptance Form of Acceptance cum Acknowledgement accompanying this Letter of Offer 15. Letter of Offer or LOF or Offer Document This Letter of Offer including the Form of Acceptance 16. Manager to the Offer or Manager or KJMC KJMC Corporate Advisors (India) Limited (formerly KJMC Global Market (India) Limited) 17. NSDL National Securities Depository Limited 18. NSE National Stock Exchange of India Limited 19. NRI Non-Resident Indians 20. Open Offer Date of Commencement of Tendering Period or Offer Opening Date Date of Closure of Tendering Period or Offer Closing Date 23. Offer Price Cash Offer being made by the Acquirer to acquire upto 33,38,042 Equity Shares of `10/- each representing 26% of Issued, Subscribed, Paid Up Equity Share and Voting Capital comprising of 1,28,38,621 fully paid up Equity Shares (on fully diluted basis) of the Target Company. 4 th January, th January, 2013 ` per equity share including interest of ` 0.70 on account of delay in commencement of Tendering Period. 24. N.A. or NA or N/A Not Applicable 25. PA / Public Announcement Announcement of the Offer made by the Acquirer on 15 th December, DPS / Detailed Public Statement Detailed Public Statement made by the Acquirer dated 22 nd December, st Supplemental PA / 1 st Supplemental Supplemental Public Announcement made by the Acquirer on Public Announcement 14 th March, nd Supplemental PA / 2 nd Supplemental Supplemental Public Announcement made by the Acquirer dated Public Announcement 4 th August, PACs Persons Acting in Concert/s 30. RBI Reserve Bank of India 31. Registrar to the Offer / Registrar Link Intime India Private Limited 32. SAT Securities Appellate Tribunal 33. SEBI Securities and Exchange Board of India 9

10 Sr. #. Abbreviations Definitions 34. SEBI (SAST) Regulations, 2011 or SEBI (SAST) Regulations or Regulations or Takeover Regulations, 2011 Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and subsequent amendments thereof 35. Tendering Period Period from 4 th January, 2013 to 17 th January, Identified Date 20 th December, FY Financial Year 38. Rs. / INR / ` Indian Rupees 2. DISCLAIMER CLAUSE IT IS TO BE DISTINCTLY UNDERSTOOD THAT FILING OF DRAFT LETTER OF OFFER WITH SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED, VETTED OR APPROVED BY SEBI. THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI FOR A LIMITED PURPOSE OF OVERSEEING WHETHER THE DISLOSURES CONTAINED THEREIN ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE REGULATIONS. THIS REQUIREMENT IS TO FACILITATE THE EQUITY SHAREHOLDER(S) OF R SYSTEMS INTERNATIONAL LIMITED TO TAKE AN INFORMED DECISION WITH REGARD TO THE OFFER. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR FINANCIAL SOUNDNESS OF THE ACQUIRER OR THE COMPANY WHOSE SHARES/CONTROL IS PROPOSED TO BE ACQUIRED OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT LETTER OF OFFER. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE ACQUIRER IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THIS LETTER OF OFFER, THE MANAGER TO THE OFFER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE ACQUIRER DULY DISCHARGES HIS RESPONSIBILITY ADEQUATELY. IN THIS BEHALF, AND TOWARDS THIS PURPOSE, THE MERCHANT BANKER KJMC GLOBAL MARKET (INDIA) LIMITED HAS SUBMITTED A DUE DILIGENCE CERTIFICATE DATED 29 th DECEMBER, 2011 TO SEBI IN ACCORDANCE WITH THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 2011 AND SUBSEQUENT AMENDMENTS THEREOF. THE FILING OF THE DRAFT LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE ACQUIRER FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE OFFER. 3. DETAILS OF THE OFFER 3.1. Background of the Offer This Open Offer is being made by the Acquirer in accordance with Regulations 3(1) and 4 of SEBI (SAST) Regulations. No other person / individual / entity is acting in concert with the Acquirer for the purpose of this Open Offer in terms of Regulation 2(1) (q) of the SEBI (SAST) Regulations This Open Offer is being made as a result of the acquisition of 9,24,142 Equity Shares representing 7.18% of total paid up Equity Share and voting capital on fully diluted basis of the Target Company as on the date of PA by the Acquirer in terms of Regulations 3(1) and 4 of the SEBI (SAST) Regulations, Following the completion of the Open Offer, if required, the Acquirer may work with the management and employees of the Target Company to grow the business of the Target Company. Notwithstanding that the Open Offer is being made under Regulation 4 of the SEBI (SAST) Regulations, the prime objective of the Acquirer behind the acquisition is the investment value in the Equity Shares of the Target Company and NOT substantial holding of shares/voting rights/control or management of the Target Company. Therefore, until and unless the Acquirer actually acquires control of the Target Company, the Acquirer would be considered as public This Open Offer is being made by Mr. Bhavook Tripathi, son of Mr. Chandraprakash Tripathi residing at Shree Goverdhan Nath Housing Society, North Main Road, Lane B, Koregaon Park, Pune Tel: , Fax: bhavook.tripathi@gmail.com to the shareholders of R Systems International Limited, and having its registered office at B-104A, Greater Kailash I, New Delhi 10

11 , Tel: , Fax: , pursuant to the Regulation 3 (1) and 4 of the SEBI (SAST) Regulations The Acquirer hereby makes this Open Offer to the shareholder(s) of the Target Company to acquire 33,38,042 fully paid up Equity Shares of the Target Company of `10/- each, representing in aggregate 26% of the paid up equity share and voting capital (on fully diluted basis), at a price of ` (Rupees One Hundred Fifty and Paisa Seventy Five only) per share payable in cash, subject to the terms and conditions mentioned in the DPS and in this Letter of Offer. The Acquirer being desirous of acquiring additional shares thereby exceeding 25 percent of the total paid up Equity Share and voting capital, has necessitated the present Open Offer under the SEBI (SAST) Regulations. The Acquirer on the date of PA, i.e. 15 th December, 2011 and after the announcement of Open Offer acquired 9,24,142 Equity Shares of the Target Company (being 7.19 % of the total paid up equity share and voting capital (on fully diluted basis)), through open market purchases. Subsequently, the Acquirer also purchased additional 8,587 Equity Shares (being 0.07 % of the total paid up Equity Share and voting capital (on fully diluted basis)) from the open market and in pursuance thereof, as on date of the PA. The Acquirer currently holds 39,93,227 Equity Shares constituting 31.10% of the total equity share and voting capital of the Target Company (on fully diluted basis) as on 20 th December, The Acquirer has not entered into any agreement / arrangement for the purposes of purchasing the Equity Shares of the Target Company The Acquirer does not intend to make changes in the Board of Directors or the management of the Target Company. During the offer period i.e. from date of purchase order, till the date of payment of consideration and certification from Manager that the Acquirer has complied with all the requirements under the SEBI (SAST) Regulations, the Acquirer or his nominees will not be appointed on the Board of Directors of the Target Company in terms of Regulation 24(1) of the SEBI (SAST) Regulations The Acquirer has not been prohibited by SEBI, from dealing in securities, in terms of the directions issued under Section 11B of the SEBI Act or any other Regulations made under the SEBI Act The Manager to the Open Offer i.e., KJMC Corporate Advisors (India) Limited (formerly KJMC Global Market (India) Limited) does not hold any shares in the Target Company, on their own account, as on the date of appointment as Manager to the Open Offer. They declare and undertake that they shall not deal on their own account in the shares of the Target Company during the Offer Period as per Regulation 27(6) of the SEBI (SAST) Regulations In terms of Regulation 26 (6) and of the SEBI (SAST) Regulations, the Board of Directors of the Target Company had constituted a committee of independent directors on 11 th January, 2012, to provide their written reasoned recommendations on the Open Offer to the shareholders of the Target Company and such recommendation shall be published atleast two working days before the date of commencement of the Open Offer in the same newspapers where the DPS was published and a copy of the same shall be sent to SEBI, BSE, NSE and Manager to the Offer by the Target Company in compliance with Regulation 26 (7) of the SEBI (SAST) Regulations Pursuant to this Open Offer assuming full acceptances, if the public shareholding in the Target Company reduces below the minimum public shareholding required as per the Securities Contracts (Regulation) Rules, 1957 as amended and the Listing Agreement, the Acquirer undertakes that it will take necessary steps to facilitate compliances of the Target Company with the relevant provisions of the Securities Contracts (Regulation) Rules, 1957 as amended, the Listing Agreement and the Regulations 7(4) and 7(5) of the SEBI (SAST) Regulations and reduce the non-public shareholding within the time period mentioned therein Details of the Proposed Offer The Acquirer has made the DPS, the 1 st Supplemental PA and the 2 nd Supplemental PA to Public Announcement in the following newspapers in accordance with the Regulation 14 (3) and pursuant to Regulation 3 (1) and 4 of SEBI (SAST) Regulations. 11

12 Newspaper Language Edition The Financial Express English All Editions Jansatta Hindi All Editions Nav Shakti Marathi Mumbai Copy of the PA, the DPS, 1 st Supplemental PA and 2 nd Supplemental PA are available on the website of SEBI ( and Manager to the Offer ( The Acquirer proposes to acquire from the existing shareholder(s) of the Target Company, 33,38,042 (Thirty Three Lac Thirty Eight Thousand and Forty Two only) fully paid-up Equity Shares of `10/- each, representing 26% of the fully paid-up equity share and voting capital (on fully diluted basis) at a price of ` per share payable in cash The Target Company does not have any partly paid up Equity Shares There is no differential price offered to the shareholders of the Target Company under the present Open Offer The Open Offer is not subject to any minimum level of acceptances from the shareholder(s) i.e., it is not a conditional offer. The Acquirer will accept all Equity Shares of the Target Company in terms of this Open Offer up to a maximum of 33,38,042 fully paid-up Equity Shares of `10/- each, representing 26% of the fully paid-up equity share and voting capital (on fully diluted basis) of the Target Company This is not a competing Offer under Regulation 20 of SEBI (SAST) Regulations. There has been no competing offer as on the date of this LOF The Equity Shares of the Target Company will be acquired by the Acquirer as fully paid up, free from all liens, charges and encumbrances and together with the rights attached thereto, including all rights to dividend, bonus and rights offer declared thereof The Acquirer has made following acquisitions of Equity Shares of the Target Company after the date of the Public Announcement till the date of this LOF via market purchase: - Sr. #. Date of Acquisition No. Shares of Purchase Price per Share 12 Aggregate Shareholding post acquisition Post Acquisition Shareholding of the Acquirer (%) 1. 9 th March, ,84, % 2. 5 th June, , ,88, % 3. 6 th June, , ,91, % 4. 7 th June, , ,92, % th June, ,93, % Apart from above, the Acquirer has not acquired any Equity Shares of the Target Company from the date of PA till the date of this LOF The Acquirer has duly complied with Regulation 8(8) and 18(6) of the SEBI (SAST) Regulations for the above mentioned acquisitions Objects Of Acquisition/Offer The Acquirer does not have any plans to dispose off or otherwise encumber any assets of the Target Company in the succeeding two years from the date of closure of the Open Offer, except in the ordinary course of business as may be permissible. The Acquirer undertakes that he shall not sell, dispose of or otherwise encumber any substantial assets of the Target Company except with the prior approval of the shareholder(s) of the Target Company through special resolution in terms of 25(2) of the SEBI (SAST) Regulations.

13 Further, the Acquirer has no intention to enter into, amend or terminate any material contracts to which the Target Company or any of its subsidiaries is a party, outside the ordinary course of business, whether such contract is with a related party (as per the meaning prescribed in the applicable accounting standards) or with any other person; The Acquirer also has no intention to accelerate any contingent vesting of a right of any person to whom the Target Company or any of its subsidiaries may have an obligation, whether such obligation is to acquire shares of the Target Company by way of employee stock options or otherwise Following the completion of the Open Offer, the Acquirer, if required, may work with the management and the employees of the Target Company to grow the business of the Target Company. However, the business of the Target Company would continue in the same manner as it was carried out in the past. Therefore, there would not be any repercussions of the acquisition by the Acquirer on the employment and the locations of the Target Company s places of business. 4. BACKGROUND OF THE ACQUIRER 4.1. Mr. Bhavook Tripathi, son of Mr. Chandraprakash Tripathi residing at Shree Goverdhan Nath Housing Society, North Main Road, Lane B, Koregaon Park, Pune He graduated in metallurgical engineering from Institute of Technology, Banaras Hindu University in the year Further, he also has a diploma in Finance, which was granted to him in the year 1993 from the University of Wyoming, United States of America The Acquirer is in the business of manufacturing ancillary auto parts through his proprietorship concern SanShu Industries and has experience of more than 12 years in this field. The Acquirer (DIN ) is also a Director in Bantri Investments Limited, Bantri Financials Private Limited and Sanshu Components Private Limited. These companies have no operations, as on date There is no Persons Acting in Concert with the Acquirer as per regulation 2(1) (q) of the SEBI (SAST) Regulations The Acquirer currently holds 31.10% of paid up Equity Shares/voting rights in the Target Company on a fully diluted basis. The Acquirer has fulfilled its obligations under Chapter II of the SEBI (SAST) Regulation, 1997 and Chapter V of the SEBI (SAST) Regulations, 2011 and subject to the allegations of SEBI in its letter dated 25th July, 2012 as mentioned in the paragraph of this Letter of Offer. The father of the Acquirer, Mr. Chandraprakash Tripathi also holds 2,500 Equity Shares of the Target Company aggregating to 0.02% of the paid up equity share capital of the Target Company on a fully diluted basis. Please refer paragraph 3.2.8, paragraph and paragraph for the details of equity shares acquired by the Acquirer The Acquirer does not hold any position on the Board of Directors of any listed company Mr. B.P. Singh of M/s B.P. Singh and Co., Chartered Accountants (Membership No: ) having their office at 414, Labh Chambers, Station Road, Aurangabad, vide certificate dated 10 th December, 2011 has certified that the net worth of the Acquirer is `2,48,08,66,000 (Rupees Two Hundred Forty Eight Crores Eight Lakhs and Sixty Six Thousand only) as on 30 th November, There are no litigations pending against the Acquirer as on the date of this LOF The Acquirer has not been prohibited by SEBI from dealing in securities under the provisions of Section 11 (B) of the SEBI Act, There are no persons on the Board of the Target Company, representing the Acquirer. 13

14 5. BACKGROUND OF THE TARGET COMPANY R Systems International Ltd, founded in 1993, is one of the leading providers of outsourced product development and customer support services. The Target Company is a leading global provider of IT solutions and Business Process Outsourcing (BPO) services. Their primary focus is to provide full service IT solutions, software engineering services, technical support, customer care and other IT enabled services to the high technology sector, independent software vendors (ISV's), banks, financial services companies, telecom, insurance and health care sector. R Systems is an integrated Product Lifecycle Management (iplm) company offering valued outsourcing services to Fortune 1000, Government and Mid-sized organizations. The Target Company offers customized services in four major verticals including; BFSI, Media & Telecom, Healthcare and Manufacturing & Logistics. The Company has thirteen development and service centre and using global delivery model to serve customers in the US, Europe, South America, the Far East, the Middle East and Africa. (Source: Equity Structure of the Target Company as on 20 th December, 2012 Paid up Equity Shares of the Target Company No. of Shares/Voting Rights Fully Paid-up Equity Shares (assuming full conversion of warrants and convertible securities including shares issued 14 % of shares/voting Rights 1,28,38, % under Employee Stock Option Scheme) Partly Paid-up Equity Shares - - Total Paid-up Equity Shares 1,28,38, % Total Voting Rights in Target Company 1,28,38, % 5.2. R Systems International Limited (CIN: L74899DL1993PLC053579) is a public limited company incorporated on 14 th May, 1993 as R Systems (India) Private Limited in the National Capital Territory of Delhi and Haryana under the Companies Act, Pursuant to a special resolution passed by the shareholders of the Target Company on 14 th March, 2000, the Target Company was converted into a public limited company and consequently, the name of the Target Company was changed to R Systems (India) Limited. A fresh certificate of incorporation reflecting the new name was issued by the Registrar of Companies, National Capital Territory of Delhi and Haryana on 13 th April, Pursuant to a special resolution passed by the shareholders of the Target Company and the approval of the Central Government dated 2 nd August, 2000, name of the Target Company was further changed to R Systems International Limited. A fresh certificate of incorporation reflecting the new name was issued by the Registrar of Companies, National Capital Territory of Delhi and Haryana on 7 th August, The Target Company made a public offer of 44,08,355 Equity Shares in the month of March, 2006 and the Equity Shares of the Target Company are listed on the NSE and BSE since 26 th April, All the Equity Shares of the Target Company are listed on the BSE and the NSE The authorised capital of the Target Company is ` 20,00,00,000 (Rupees Twenty Crore only) divided into 2,00,00,000 (Two Crore) Equity Shares of `10/- each The Target Company has complied with all the listing requirements and the trading of the Target Company s stock has never been suspended from either the BSE or the NSE. Further, no penal/punitive actions have been taken by BSE and/or NSE. There are no instruments convertible into the Equity Shares at a future date other than the stock options granted to the employees of the Target Company, in the books of the Target Company as on the date of this LOF. There are no partly paid up Equity Shares in the books of the Target Company as on the date of this LOF There are 3,47,885 outstanding stock options held by the employees of the Company under the prevailing Employee Stock Option Scheme of the Company entitling the said employees to 3,47,855 Equity Shares of the Target Company of a face value of `10 each. Other than as stated above, the Target Company does not

15 have any outstanding convertible instruments (warrants / Fully Convertible Debentures (FCDs) / Partly Convertible Debentures (PCDs)) etc. or options or similar instruments, convertible into Equity Shares at a later stage. These outstanding stock options have been taken into account for calculating the Equity Share capital and voting rights of the Target Company None of the Directors of the Target Company represent the Acquirer Present composition of the Board of Directors: Name of the Director Mr. Satinder Singh Rekhi Lt. Gen. Baldev Singh (Retd.) Mr. Raj Swaminathan Mr. Raj Kumar Gogia Mr. Suresh Paruthi Mr. Gurbax Singh Bhasin Mr. Anuj Kanish Director Identification Number Designation Chairman & Managing Director President & Senior Executive Director Director & Chief Operating Officer Nonexecutive Independent Director Nonexecutive Independent Director Nonexecutive Independent Director Alternate Director to Mr. Gurbax Singh Bhasin Date of Appointment May 14, 1993 September 1, 1997 September 29, 2006 July 9, 2002 September 29, 2006 December 27, 2005 July 28, 2012 Qualification Bachelor of Technology from IIT, Kharagpur, India and Masters in Business Administration from California State University, Sacramento Master degree in Military Sciences from Madras University and two short courses in Strategic Account Management and Marketing from University of California. Post Graduate Diploma in Business Management from Xavier Labour Relations Institute, Jamshedpur and Bachelor of Engineering (Mechanical) from Bangalore University B.Tech Honors in Electrical Engineering from IIT Kharagpur Bachelor of Technology (Hons.) from IIT Kharagpur and certificate course in Export Marketing from the Indian Institute of Foreign Trade, New Delhi Bachelor of Engineering Bachelor of Engineering (Electrical Engineering from Delhi College of Engineering and MS (Information Systems) from University of Texas at Arlington. Experience Having over 29 years experience in Information Technology industry. Having more than 46 years of experience including handling top managerial, diplomatic and human resource development related assignments Having 27 years of experience in IT and Financial Services industry. Having 49 years of experience of serving various Indian, multinational and foreign concerns. Having wide experience of efficiently serving various multinationals. Having 30 years of experience in textile/fashion apparel industry and import/export. Having over 16 years of experience. 15

16 5.8. The Target Company has the following subsidiaries: Sr. No. Name of the company Country of Incorporation 1. R Systems (Singapore) Pte Limited Singapore 2. R Systems, Inc. United States of America 3. Indus Software, Inc. United States of America 4. ECnet Limited Singapore 5. R Systems Solutions, Inc. United States of America 6. R Systems NV Belgium 7. R Systems Europe B.V. The Netherlands 8. R Systems S.A.S. France 9. Computaris International Limited United Kingdom 10. Systémes R. International Ltée^ Canada ^ No capital has been contributed by the Target Company till the date of this LOF. The following are the subsidiaries of ECnet Limited, Singapore: Sr. No. Name of the company Country of Incorporation 1. ECnet (M) Sdn. Bhd. Malaysia 2. ECnet Inc. United States of America 3. ECnet (Hong Kong) Limited Hong Kong 4. ECnet Systems (Thailand) Company Limited Thailand 5. ECnet Kabushiki Kaisha Japan 6. ECnet (Shanghai) Co. Ltd. Peoples Republic of China The following are the subsidiaries of Computaris International Limited Sr. No. Name of the company Country of Incorporation 1. Computaris International Srl Moldova 2. Computaris Malaysia Sdn. Bhd. Malaysia 3. Computaris Polska sp z o.o. Poland 4. Computaris Romania SRL Romania 5. Computaris USA, LLC United States of America 6. Computaris Limited United Kingdom All the above mentioned subsidiaries are incorporated and based out of India and all are wholly owned subsidiaries of the Target Company save and except ECnet Limited, Singapore in which the Target Company holds 99.56% The Target Company is not a Sick Company and is not referred to BIFR. The Target Company does not have any overdue liabilities to Banks / Financial Institutions There has not been any merger or demerger or spin-off of activity in the preceding 3 years The Target Company has entered into agreement with NSDL and CDSL for offering Equity Shares in demat form The Target Company has no arrears of listing fee to BSE and NSE. 16

17 5.13. The brief consolidated audited financial statements past three years and consolidated financial statements (Limited Review) for the 3 month period ended September 30, 2012 and 6 month period ended June 30, 2012 are as under: - Consolidated Profit & Loss Statement: (` in Lacs) For the Year / period ended 30-Sept-12 3 Months (Limited Review) 30-Jun-12 6 Months (Limited Review) Income from Operations 11, , Other Income Increase/ (Decrease) in Stock NA NA Total Income 11, , Total Expenditure 10, , Profit / (Loss) before interest & depreciation 1, , Interest Depreciation & Goodwill impairment Other expenditure Profit / (Loss) before Tax & prior period Adjustment , Provision for Tax Profit / (Loss) after Tax & prior period Adjustment , Prior Period Adjustment Net Profit , Bal. Brought Forward from earlier years 9, , Bal. Transferred to Balance Sheet 9, , For the Year / period ended 31-Dec Months (Audited) 31-Dec Months (Audited) (` in Lacs) 31-Dec Months (Audited) Income from Operations 32, , , Other Income Increase/ (Decrease) in Stock NA NA NA Total Income 33, , , Total Expenditure 28, , , Profit / (Loss) before interest & depreciation 4, , , Interest Depreciation & Goodwill impairment 3, , , Other expenditure Profit / (Loss) before Tax & prior period Adjustment 1, , , Provision for Tax (221.84) Profit / (Loss) after Tax & before prior period Adjustment , , Prior Period Adjustment Net Profit , , Bal. Brought Forward from earlier years 5, , ,